Wedbush analyst Dan Ives has stepped up his warnings about Tesla’s robo-taxi if CEO Elon Musk makes it a priority and pushes the cheaper electric vehicle into the backseat.
Longtime Tesla Bull told CNBC on Friday that such a move would be a gamble that could shape the electric car maker’s future for the next few years.
The sub-$30,000 mass-market electric vehicle that Wall Street has dubbed the Model 2 could account for 50% to 60% of Tesla’s incremental growth in the next two to three years, while a fully autonomous robotaxi may not be ready yet. another five to six years, Ives said.
“We’ve had a lot of white-knuckle moments between Musk and Tesla,” he added. “It’s there.”
Ives, who has often coined various metaphors and analogies for his hot takes on Tesla, warned that what was once a Cinderella story could turn into a “Nightmare on Elm Street.”
While he’s optimistic about the long term for robo-taxi and autonomous driving, it shouldn’t come at the expense of the Model 2.
“If this had happened, it would have been a disaster of epic proportions,” Ives said.
He predicted Tesla will face a moment of truth on Tuesday, when quarterly earnings are released and Musk holds a conference call with Wall Street analysts.
If Tesla’s loyal bulls don’t like what they hear on the phone, they might back out, since removing the Model 2 would leave a huge hole in the company’s growth for the next few years, he said. Ives compared it to Apple CEO Tim Cook dropping a similar bombshell during his May 2 earnings call.
“It would be like Cook on May 2 coming out and saying, ‘Okay, iPhone 15 – look, we won’t have anything until iPhone 21.’ But trust us.” Thanks for being on the call,” Ives joked.
Of course, he said he remains optimistic about Tesla in the long term, but said he also needs to hear Musk’s growth strategy in China, which accounts for 60%-70% of the company’s growth but where cutthroat competition in electric vehicles has created ” game.” The Thrones situation.
Musk’s credibility is also at stake, as the last few earnings calls have been “a horror show about a train wreck,” Ives added.
The stakes are high for Tesla after reporting quarterly delivery figures that were 13% below Wall Street consensus estimates earlier this month. Meanwhile, Tesla shares are down 41% year to date.
In a research note last week, Ives said Musk and company were weathering a “Category 5 demand storm” in the electric vehicle market. He said Tesla is stuck between “two waves of growth”: the first driven by a surge in sales of high-end electric vehicles, and the second expected to come from mass-market electric vehicles and robo-taxis. But despite this history, “patience among investors is beginning to wear thin.”
This comes after Reuters reported Earlier this month, Tesla abandoned plans to build the Model 2. Musk responded in tweetsaying simply that “Reuters is lying (again)” without providing any explanation.
Amid recent demand issues, Musk also announced April 5 that Tesla will introduce its robot taxi at the end of the summer.
Meanwhile, Tesla late Friday slashed the prices of its electric vehicles in the United States, bringing some models to their lowest levels ever. It comes after Musk announced 10% layoffs last week and recalled nearly 3,900 Cybertruck pickups to fix or replace accelerator pedals that can cause unintended acceleration.